Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q þ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended December 31, 2023 or o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from____________________ to _________________________ Commission File Number: 0-261 ALICO, INC. (Exact name of registrant as specified in its charter) Fl ...

FORT MYERS, Fla., Feb. 05, 2024 (GLOBE NEWSWIRE) -- Alico, Inc. ("Alico" or the "Company") (NASDAQ:ALCO) today announced that the Company will release financial results for the first quarter ended December 31, 2023, on Wednesday, February 7, after the market close. The Company will host a conference call to discuss its financial results on Thursday, February 8, 2024, at 8:30 am Eastern Time. Interested parties may join the conference call by dialing 1-888-886-7786 in the United States and 1-416-764-8658 fro ...

Group 1 - Alico, Inc. will release its financial results for the first quarter ended December 31, 2023, on February 7, 2024, after market close [1] - A conference call to discuss the financial results is scheduled for February 8, 2024, at 8:30 am Eastern Time [1] - The company operates primarily in two divisions: Alico Citrus, a major citrus producer, and Land Management and Other Operations, which includes land leasing [2]

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FORT MYERS, Fla., Jan. 12, 2024 (GLOBE NEWSWIRE) -- Alico, Inc. ("Alico" or the "Company") (NASDAQ:ALCO) announced today that John Kiernan, the Company's Chief Executive Officer and President, will present and host one-on-one meetings with investors at the Sidoti January Virtual Investor Conference, taking place on January 17th and 18th of 2024. The presentation will begin at 8:15AM EST on January 17th and can be accessed live here: https://sidoti.zoom.us/webinar/register/WN_0cggnfidRDSKMh74VUwgiQ Alico wil ...

Company Overview - Alico, Inc. has over 125 years of experience in agriculture and manages 49,000 acres of citrus groves across 7 counties and 31 locations in the U.S. [2] - Alico is the top citrus grower in the U.S. and the primary supplier to Tropicana, a leading orange juice brand [2] - The company is recognized for its exceptional caretaking practices, leading to a new partnership with a large citrus grower to manage 3,300 acres of citrus groves [2] Upcoming Events - John Kiernan, the CEO and President of Alico, will attend the 26th ICR Conference in Orlando, Florida, from January 8 to 9, 2024 [1] - Alico will present at the ICR Conference on January 8 at 3:30 PM EST, with a breakout session following at 4:00 PM [2] - An additional breakout session is scheduled for the morning of January 8 at 9:00 AM [2] Industry Context - The ICR Conference, established in 1998, brings together over 2,500 attendees, including management teams from more than 250 growth companies, institutional investors, and analysts [3] - The conference features panels on industry trends, dynamic speakers, and networking opportunities for key stakeholders [3] Business Operations - Alico operates primarily through two divisions: Alico Citrus, one of the largest citrus producers in the nation, and Land Management and Other Operations, which includes land leasing and support operations [4]

Financial Data and Key Metrics Changes - For the fiscal year ended September 30, 2023, total operating revenue was $39.8 million, a decrease from $91.9 million for the fiscal year ended September 30, 2022 [11] - Citrus revenue decreased to $38.1 million from $89.7 million in the previous year, driven by reduced fruit harvested due to Hurricane Ian [12] - Net income attributable to Alico common stockholders was $1.8 million for the fiscal year ended September 30, 2023, down from $12.5 million in the prior year [17] - Adjusted EBITDA was a loss of $16.1 million for the year ended September 30, 2023, compared to income of $13.4 million for the prior fiscal year [17] - Total operating expenses decreased to $33.4 million from $106.7 million in the same period last year, primarily due to insurance proceeds and reduced harvest expenses [14] Business Line Data and Key Metrics Changes - The overall decrease in box production for Alico was 51.5% for the 2022-2023 harvest season compared to the prior year [4] - The decrease in pound solids per box was attributed to lower internal fruit quality and accelerated harvesting to minimize fruit drop [13] - Grove management services revenue decreased by $10.7 million due to the termination of a property management agreement in June 2022 [12] Market Data and Key Metrics Changes - The USDA reported a 61.7% decrease in box production for the overall Florida orange crop compared to the same period in the prior year [4] - Alico's average realized price per pound solids improved by 2.6% for the year ended September 30, 2023, due to lower overall production of citrus fruit [13] Company Strategy and Development Direction - Alico continues to invest in its groves, applying oxytetracycline therapy to over 35% of its trees to combat citrus greening [6] - The company is evaluating the highest and best use of its real estate assets while maintaining its citrus operations [10] - Alico has partnered with another large citrus grower to manage approximately 3,300 acres of citrus groves, indicating a focus on expanding its management services [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a significant crop recovery for the 2023-2024 season due to exceptional caretaking practices and the maturity of over 2 million trees planted since 2017 [6] - The company is hopeful for federal disaster relief funds to assist in recovery from Hurricane Ian, although the timing and amount remain uncertain [5] - Management highlighted the strength of the balance sheet, with $70 million available in undrawn credit, providing liquidity during recovery [7] Other Important Information - Alico sold approximately 2,255 acres of ranch land for about $12 million and anticipates closing a deal to sell 17,229 acres of Alico Ranch for approximately $77.6 million by February 2024 [8] - All shareholder litigation related to the balance sheet restatement last year has been voluntarily dismissed [10] Q&A Session Summary Question: Clarity on citrus recovery after Hurricane Ian - Management indicated that clarity on the size and quality of the crop will be available in a couple of months after evaluating the Early and Mid-Season harvests [22][23] Question: Efficacy of oxytetracycline treatment - Management noted visible differences in treated trees and expressed hope for improved fruit quality and reduced drop rates, but definitive efficacy will be evaluated at the end of the season [25][26] Question: Update on contracts and pricing - Management confirmed that contracts have been renewed at higher price points, with negotiations for other contracts expected to begin soon [27][28] Question: Real estate land-use planning - Management stated that planning is in early stages and will be conducted internally before engaging with external parties [33] Question: Opportunities in grove management - Management sees potential for growth in third-party caretaking services, focusing on selective opportunities that are self-contained or near existing operations [36]

PART I [Business](index=6&type=section&id=Item%201.%20Business) Alico, Inc. is a major Florida agribusiness focused on citrus production and land management, significantly impacted by Hurricane Ian and highly dependent on Tropicana - Alico operates two primary business segments: Alico Citrus (citrus production and management) and Land Management and Other Operations (leasing for grazing, hunting, mining, etc.)[17](index=17&type=chunk)[18](index=18&type=chunk) - Hurricane Ian in September 2022 adversely impacted a majority of the company's groves, affecting the FY2023 fruit production. The company received $27.4 million in crop insurance proceeds and $0.8 million for property damage as of September 30, 2023[20](index=20&type=chunk)[21](index=21&type=chunk) - In September 2023, Alico agreed to sell 17,229 acres of the Alico Ranch to the State of Florida for approximately $77.6 million, with proceeds intended to repay variable rate debt[19](index=19&type=chunk) - The company is testing a new application of Oxytetracycline (OTC) to mitigate the effects of citrus greening, with over 35% of its trees treated as of September 30, 2023[23](index=23&type=chunk)[24](index=24&type=chunk) | Land Holdings & Activities | Gross Acreage | | :--- | :--- | | **Alico Citrus** | | | Citrus Groves & Nursery | 48,949 | | **Land Management & Other Operations** | | | Ranch, Mining Lease, Other | 22,854 | | **Total** | **71,803** | - Tropicana is a significant customer, accounting for **81.3%**, **79.7%**, and **77.5%** of consolidated revenue for fiscal years 2023, 2022, and 2021, respectively[50](index=50&type=chunk) [Risk Factors](index=12&type=section&id=Item%201A.%20Risk%20Factors) Alico faces significant risks from adverse weather, citrus diseases, high customer concentration, market volatility, and substantial indebtedness - **Business Risks:** - **Weather & Natural Disasters:** Geographic concentration in Florida makes the company highly vulnerable to hurricanes and tropical storms, which can destroy crops and affect production for multiple seasons, as seen with Hurricane Ian[72](index=72&type=chunk)[74](index=74&type=chunk) - **Citrus Disease:** Citrus greening and citrus canker are widespread in Florida and exist in the company's groves, posing a significant threat to productivity and increasing costs, with no known cure for either disease[75](index=75&type=chunk)[76](index=76&type=chunk)[78](index=78&type=chunk) - **Customer Concentration:** High dependence on Tropicana (**81.3%** of revenue in FY2023) creates significant risk. The loss or a significant reduction in business from this customer would materially harm revenue and financial position[84](index=84&type=chunk)[85](index=85&type=chunk) - **Seasonality & Market Volatility:** The citrus business is seasonal, with most revenue generated in the second and third quarters. Earnings are sensitive to unpredictable fluctuations in market supply and prices[100](index=100&type=chunk)[103](index=103&type=chunk) - **Financial & Corporate Risks:** - **Indebtedness:** Significant debt (**$129.3M** as of Sept 30, 2023) requires substantial cash flow for debt service, reducing funds for other purposes and increasing vulnerability to economic downturns. Some debt is at variable interest rates, posing a risk in a rising rate environment[128](index=128&type=chunk)[130](index=130&type=chunk) - **Tax Classification:** The company benefits from reduced real estate taxes due to the agricultural classification of its land. Changes in this classification could significantly increase tax liabilities[114](index=114&type=chunk) [Unresolved Staff Comments](index=22&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - None[134](index=134&type=chunk) [Properties](index=23&type=section&id=Item%202.%20Properties) Alico owns approximately 72,000 acres in Florida, primarily for citrus groves and land management, with a significant portion encumbered by debt | Primary Use | Total Acreage | Key Counties | | :--- | :--- | :--- | | **Alico Citrus** | **48,949** | DeSoto, Hendry, Polk, Collier | | Citrus Groves | 48,927 | DeSoto (21,590), Hendry (8,900) | | Citrus Nursery | 22 | DeSoto (22) | | **Land Management** | **22,854** | Hendry, Collier, Glades | | Ranch & Other | 22,328 | Hendry (18,722), Collier (3,606) | | Mining | 526 | Glades (526) | | **Total** | **71,803** | | - Approximately 48,949 acres of the properties are encumbered by credit agreements totaling **$216.5 million**, with **$104.6 million** outstanding at September 30, 2023[136](index=136&type=chunk) [Legal Proceedings](index=23&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently involved in material legal proceedings, as prior class action and shareholder derivative suits were dismissed - There are no current legal proceedings expected to have a material adverse effect on the company's financial position[345](index=345&type=chunk) - A class action lawsuit and a shareholder derivative suit filed in early 2023 were both voluntarily dismissed by the plaintiffs in August 2023[346](index=346&type=chunk)[347](index=347&type=chunk) [Mine Safety Disclosures](index=23&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not Applicable[139](index=139&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=24&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Alico's common stock trades on Nasdaq, with 394 holders of record, and the quarterly dividend was significantly reduced in December 2022 - The company's common stock trades on the Nasdaq Global Select Market under the symbol ALCO[142](index=142&type=chunk) - The Board of Directors reduced the quarterly dividend to **$0.05** per common share in December 2022, down from a previous **$0.50** per share[133](index=133&type=chunk)[146](index=146&type=chunk) [Reserved](index=24&type=section&id=Item%206.%20Reserved) This item is reserved [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) FY2023 revenues declined significantly due to Hurricane Ian, impacting citrus and net income, with liquidity supported by operations and asset sales [Consolidated Results of Operations](index=25&type=section&id=7.1%20Consolidated%20Results%20of%20Operations) Total operating revenues decreased **56.7%** to **$39.8 million** in FY2023 due to Hurricane Ian, leading to a significant drop in net income | (in thousands) | FY 2023 | FY 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Total operating revenues | $39,846 | $91,947 | (56.7)% | | Gross profit (loss) | $6,446 | $(14,765) | (143.7)% | | (Loss) income from operations | $(4,197) | $(24,844) | (83.1)% | | Net income attributable to Alico, Inc. | $1,835 | $12,459 | (85.3)% | [Alico Citrus Segment Analysis](index=27&type=section&id=7.2%20Alico%20Citrus) Alico Citrus revenue plummeted **57.5%** to **$38.1 million** in FY2023 due to Hurricane Ian, partially offset by insurance proceeds | Alico Citrus (in thousands, except per unit data) | FY 2023 | FY 2022 | Change (%) | | :--- | :--- | :--- | :--- | | **Operating Revenues** | **$38,145** | **$89,681** | **(57.5)%** | | Total Boxes Harvested | 2,689 | 5,540 | (51.5)% | | Total Pound Solids Produced | 13,288 | 28,790 | (53.8)% | | Price per Pound Solids (Valencia) | $2.75 | $2.68 | 2.6% | | **Operating Expenses** | **$32,959** | **$106,192** | **(69.0)%** | - The decrease in revenue was primarily due to increased fruit drop caused by Hurricane Ian, reducing the harvest of both Early/Mid-Season and Valencia fruit[159](index=159&type=chunk) - Operating expenses were significantly reduced by the receipt of approximately **$27.4 million** in crop insurance and **$0.8 million** in property/casualty reimbursements for Hurricane Ian[165](index=165&type=chunk)[168](index=168&type=chunk) [Land Management and Other Operations Segment Analysis](index=29&type=section&id=7.3%20Land%20Management%20and%20Other%20Operations) Land Management revenue decreased **24.9%** to **$1.7 million** in FY2023, primarily due to reduced grazing and hunting lease income from ranch land sales | (in thousands) | FY 2023 | FY 2022 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $1,701 | $2,266 | (24.9)% | | Operating Expenses | $441 | $520 | (15.2)% | - The decrease in revenue was mainly due to a reduction in grazing and hunting lease income following the sale of ranch land[171](index=171&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=7.4%20Liquidity%20and%20Capital%20Resources) Working capital increased to **$43.7 million** in FY2023, with liquidity supported by cash, asset sales, and available credit lines despite cash used in operations | (in thousands) | Sep 30, 2023 | Sep 30, 2022 | | :--- | :--- | :--- | | Working capital | $43,740 | $15,091 | | Total assets | $428,353 | $409,255 | | Principal amount of debt | $129,319 | $111,624 | | Debt ratio | 0.30 to 1 | 0.27 to 1 | | Cash Flows (in thousands) | FY 2023 | FY 2022 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(6,254) | $6,523 | | Net cash (used in) provided by investing activities | $(4,123) | $22,468 | | Net cash provided by (used in) financing activities | $13,204 | $(29,012) | - The company has a **$70 million** working capital line of credit and a **$25 million** revolving line of credit, with substantial availability under both as of September 30, 2023[180](index=180&type=chunk) [Critical Accounting Policies and Estimates](index=31&type=section&id=7.5%20Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies involve significant judgment in revenue recognition, inventory valuation (especially unharvested crops and casualty losses), and income tax estimates - **Revenue Recognition:** Revenue is recognized upon delivery, but initial amounts are often estimated based on contractual floor/ceiling prices and market conditions, requiring subsequent adjustments[191](index=191&type=chunk) - **Inventories:** Costs of growing crops are capitalized. In the event of a casualty loss like a hurricane, management must estimate the fruit drop and expected production to determine any necessary write-down to net realizable value[192](index=192&type=chunk) - **Income Taxes:** The company must assess the need for a valuation allowance against deferred tax assets, considering future taxable income and tax planning strategies. A valuation allowance of **$4.2 million** was recorded as of September 30, 2023[194](index=194&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=34&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate risk on variable-rate debt, with no exposure to foreign exchange, equity price, or commodity price risks - The company is subject to interest rate risk on its variable-rate debt. A **1%** increase in prevailing interest rates would have increased annual interest expense by approximately **$438,000** for FY2023[203](index=203&type=chunk) - The company has no exposure to foreign-exchange rate risk as all transactions are in U.S. dollars[203](index=203&type=chunk) [Financial Statements and Supplementary Data](index=34&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited financial statements with an unqualified auditor's opinion, highlighting unharvested fruit crop inventory valuation as a critical audit matter - The independent auditor, RSM US LLP, issued an unqualified opinion on the financial statements and the effectiveness of internal control over financial reporting as of September 30, 2023[212](index=212&type=chunk)[224](index=224&type=chunk) - A critical audit matter was identified concerning the net realizable value of unharvested fruit crop on trees, due to the significant management judgments involved in estimating future crop yield and citrus pricing[217](index=217&type=chunk)[218](index=218&type=chunk) [Note 2: Summary of Significant Accounting Policies](index=45&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) Key accounting policies cover revenue recognition for fruit sales and services, inventory valuation (growing crops), property and equipment depreciation, and annual goodwill impairment testing - Revenue from fruit sales is recognized upon delivery, with the transaction price subject to variable consideration based on market prices, often within a contractual floor and ceiling[252](index=252&type=chunk)[253](index=253&type=chunk) - Costs of growing crops are capitalized into inventory and expensed as cost of sales upon harvest. Inventories are valued at the lower of cost or net realizable value[269](index=269&type=chunk) - The company's largest customer, Tropicana, accounted for **81.3%** of total revenue in FY2023[266](index=266&type=chunk) [Note 3: Inventories](index=50&type=section&id=Note%203.%20Inventories) Total inventories were **$52.5 million** as of September 30, 2023, with unharvested fruit crop significantly impacted by Hurricane Ian, leading to **$28.2 million** in insurance proceeds | Inventories (in thousands) | Sep 30, 2023 | Sep 30, 2022 | | :--- | :--- | :--- | | Unharvested fruit crop on the trees | $50,699 | $26,717 | | Other | $1,782 | $965 | | **Total inventories** | **$52,481** | **$27,682** | - In FY2023, the company received insurance proceeds of approximately **$27.4M** for crop claims and **$839k** for property damage related to Hurricane Ian[285](index=285&type=chunk) - The company also received **$1.3M**, **$1.1M**, and **$4.3M** in federal relief from the Hurricane Irma CRBG program in fiscal years 2023, 2022, and 2021, respectively[287](index=287&type=chunk) [Note 6: Long-Term Debt and Lines of Credit](index=52&type=section&id=Note%206.%20Long-Term%20Debt%20and%20Lines%20of%20Credit) Total long-term debt and lines of credit amounted to **$129.3 million** as of September 30, 2023, including fixed and variable-rate loans, with variable rates increasing | Debt Summary (in thousands) | Sep 30, 2023 | | :--- | :--- | | Met fixed-rate term loans | $70,000 | | Met variable-rate term loans | $19,094 | | Pru loans A & B | $11,615 | | WCLC outstanding | $24,722 | | **Total Future Maturities** | **$129,319** | - The company has a **$70M** working capital line of credit (WCLC) and a **$25M** revolving line of credit (RLOC), with **$45.0M** and **$25.0M** available, respectively, at year-end[299](index=299&type=chunk) - Interest rates on variable-rate debt have transitioned from LIBOR to SOFR-based rates. The rate on the Met Variable-Rate Term Loans was **7.52%** at Sept 30, 2023, up from **4.27%** a year prior[302](index=302&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=62&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[350](index=350&type=chunk) [Controls and Procedures](index=62&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of September 30, 2023, having remediated a material weakness related to income tax provision processes - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of September 30, 2023[352](index=352&type=chunk) - The company has remediated a previously disclosed material weakness related to controls over the income tax provision and the evaluation of misstatements[353](index=353&type=chunk) - Remediation measures included designing and implementing new controls for the income tax provision, hiring personnel with added expertise, and changing the process for evaluating misstatements[354](index=354&type=chunk) [Other Information](index=63&type=section&id=Item%209B.%20Other%20Information) Alico entered a material agreement to sell **17,229 acres** of Alico Ranch to the State of Florida for approximately **$77.6 million** under the Florida Forever Program - On September 18, 2023, the company entered into an Option Agreement to sell **17,229 acres** of the Alico Ranch to the State of Florida for approximately **$77.6 million**[359](index=359&type=chunk) - The sale is part of the Florida Forever Program and proceeds are intended to be used to repay variable rate debt and for general corporate purposes[359](index=359&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=64&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section provides biographical information for directors and executive officers, with additional details incorporated by reference from the Proxy Statement | Name | Position(s) | | :--- | :--- | | John E. Kiernan | Director, President and Chief Executive Officer | | George R. Brokaw | Chairman | | Katherine R. English | Director | | Benjamin D. Fishman | Director | | W. Andrew Krusen, Jr. | Director | | Toby K. Purse | Director | | Adam H. Putnam | Director | | Henry R. Slack | Director | | Name | Position(s) | | :--- | :--- | | John E. Kiernan | Director, President and Chief Executive Officer | | Bradley Heine | Chief Financial Officer | | Danny Sutton | President of Alico Citrus | | James Sampel | Chief Information Officer | - The company has adopted a Code of Business Conduct and Ethics, which is available on its website[377](index=377&type=chunk) [Executive Compensation](index=66&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation information is incorporated by reference from the definitive Proxy Statement for the 2024 Annual Meeting of Stockholders - Information is incorporated by reference from the definitive Proxy Statement for the 2024 Annual Meeting of Stockholders[379](index=379&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=66&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section details equity compensation arrangements under the 2015 Stock Incentive Plan, with **1,145,183** securities available for future issuance | Equity Compensation Plan Information | As of Sep 30, 2023 | | :--- | :--- | | Securities to be issued upon exercise of outstanding options | 38,000 | | Weighted-average exercise price of outstanding options | $33.75 | | Securities remaining available for future issuance | 1,145,183 | [Certain Relationships and Related Transactions, and Director Independence](index=67&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on certain relationships, related transactions, and director independence is incorporated by reference from the definitive Proxy Statement - Information is incorporated by reference from the definitive Proxy Statement for the 2024 Annual Meeting of Stockholders[382](index=382&type=chunk) [Principal Accountant Fees and Services](index=67&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information on principal accountant fees and services is incorporated by reference from the definitive Proxy Statement - Information is incorporated by reference from the definitive Proxy Statement for the 2024 Annual Meeting of Stockholders[383](index=383&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=68&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists financial statements and exhibits, including credit agreements, employment agreements, and the recent land sale option agreement - The Consolidated Financial Statements are included in Part II, Item 8 of the report[385](index=385&type=chunk) - The Exhibit Index lists all documents filed or incorporated by reference, including credit agreements, employment agreements, and other material contracts[387](index=387&type=chunk) [Form 10-K Summary](index=72&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable - Not applicable[393](index=393&type=chunk)

Financial Data and Key Metrics Changes - For the three months ended June 30, 2023, the company reported net income attributable to Alico common stockholders of approximately $11.8 million, compared to $2.7 million for the same period in the prior year [12] - Total operating revenue for the quarter was approximately $7.3 million, down from $25.9 million for the same quarter in 2022, primarily due to a decrease in Valencia fruit harvested [14] - Adjusted EBITDA was approximately a loss of $1.3 million for the third quarter ended June 30, 2023, compared to a gain of $2.8 million for the same period in the prior fiscal year [21] Business Line Data and Key Metrics Changes - Citrus revenue for the quarter was approximately $6.7 million, down from $25.5 million in the same quarter of the previous year, driven by a decrease in Valencia fruit harvested [14] - The decrease in Valencia box production was down 49%, while the USDA forecasted a decrease of 55% for the Valencia crop [15][16] - The company experienced a 4.4% improvement in the price per pound solids for the three months ended June 30, 2023, due to lower production leading to reduced inventory levels [16] Market Data and Key Metrics Changes - The overall Florida orange crop is expected to decrease from approximately 41.2 million boxes for the 2021-2022 crop year to approximately 15.9 million boxes for the 2022-2023 crop year, a decrease of approximately 61.5% [15] - The Early and Mid-season crop for the season was down 55%, aligning closely with the USDA's forecast of a 56.5% decline [15] Company Strategy and Development Direction - The company is focused on caretaking for its groves and is optimistic about the upcoming harvest season, expecting substantial increases in harvested fruit due to consistent grove caretaking practices and new citrus greening therapy [4][23] - Alico aims to provide investors with the benefits of conventional agricultural investment while enhancing optionality through active land management [24] Management's Comments on Operating Environment and Future Outlook - Management expressed guarded optimism for the upcoming citrus harvest season, citing the recovery from Hurricane Ian and the application of new citrus greening therapy [4][23] - The company is awaiting federal relief funds related to Hurricane Ian and is actively working with industry groups to finalize relief programs [7][24] Other Important Information - The company received approximately $21.4 million in crop insurance proceeds through June 30, 2023, and an additional $0.3 million in July [5] - Alico sold approximately 1,436 acres of ranch land for net proceeds of approximately $7.6 million and is engaged with third parties for additional land sales [11] Q&A Session Summary Question: What is the initial take on the trees and harvest for the 2023-2024 season? - Management indicated it is too early to make forecasts, but inspections show no permanent damage from Hurricane Ian [27] Question: When will a better view of the harvest be available? - Management suggested waiting until closer to the harvest for more accurate estimates [29] Question: What is the size of the Punta Gorda grove? - The Punta Gorda grove is approximately 1,000 acres [31] Question: What are the costs associated with the OTC treatment? - The cost per tree for the OTC treatment has likely decreased to below $1 per application due to economies of scale [33] Question: Can you provide details on the Tropicana contract laddering? - The Tropicana contract extended is one of the smaller contracts, with larger contracts expiring at the end of the next harvest [35]

```markdown [Part I - FINANCIAL INFORMATION](index=2&type=section&id=Part%20I%20-%20FINANCIAL%20INFORMATION) [Condensed Consolidated Financial Statements](index=2&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) Alico, Inc.'s unaudited condensed consolidated financial statements for the three and nine months ended June 30, 2023, and 2022, are presented [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Summary (in thousands) | Account | June 30, 2023 | September 30, 2022 | | :--- | :--- | :--- | | **Total current assets** | $47,695 | $31,616 | | **Total assets** | $421,126 | $409,255 | | **Total current liabilities** | $15,389 | $16,525 | | **Total liabilities** | $171,474 | $160,390 | | **Total stockholders' equity** | $249,652 | $248,865 | - **Total current assets** increased primarily due to **higher inventories** (**$38.8 million** vs **$27.7 million**) and **accounts receivable** (**$4.4 million** vs **$0.3 million**) compared to September 30, 2022[14](index=14&type=chunk) - **Total liabilities** increased, driven mainly by a rise in borrowings on lines of credit from **$4.9 million** to **$17.9 million**[14](index=14&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statement of Operations Summary (in thousands, except per share) | Metric | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | **Total operating revenues** | $7,284 | $25,938 | $39,166 | $90,916 | | **Gross profit** | $15,502 | $1,311 | $5,373 | $7,121 | | **Income (loss) from operations** | $12,572 | $(1,246) | $(2,733) | $(558) | | **Net income attributable to Alico** | $11,832 | $2,706 | $895 | $33,539 | | **Diluted EPS** | $1.56 | $0.36 | $0.12 | $4.44 | - **Operating revenues** for the nine months ended June 30, 2023, **decreased significantly** to **$39.2 million** from **$90.9 million** in the prior year, primarily due to **lower citrus production**[15](index=15&type=chunk) - **Gross profit** for Q3 2023 was **substantially higher** at **$15.5 million** compared to **$1.3 million** in Q3 2022, largely due to the recognition of insurance proceeds which reduced operating expenses[15](index=15&type=chunk) - **Gain on sale of real estate**, property and equipment was **significantly lower** in the first nine months of 2023 (**$7.4 million**) compared to the same period in 2022 (**$40.8 million**)[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for Nine Months Ended June 30 (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | **Net cash (used in) provided by operating activities** | $(618) | $10,792 | | **Net cash (used in) provided by investing activities** | $(5,718) | $27,535 | | **Net cash provided by (used in) financing activities** | $7,063 | $(29,684) | | **Net increase in cash** | $727 | $8,643 | - **Cash from operations** turned **negative** for the nine months ended June 30, 2023, a **significant shift** from the **positive $10.8 million** in the prior year, mainly due to **lower net income** before non-cash items[25](index=25&type=chunk) - **Investing activities** used cash, driven by **lower proceeds from asset sales** (**$7.6 million** in 2023 vs. **$42.7 million** in 2022)[25](index=25&type=chunk) - **Financing activities** provided cash, **primarily from increased net borrowings** on revolving lines of credit[25](index=25&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - The company operates in two segments: **Alico Citrus** and **Land Management and Other Operations**[26](index=26&type=chunk)[31](index=31&type=chunk) - The company recognized **significant insurance proceeds** of **$21.4 million** in the nine months ended June 30, 2023, related to **Hurricane Ian** crop claims, which were recorded as a reduction in operating expenses[55](index=55&type=chunk) - The company sold approximately **1,436 acres** of land for total proceeds of approximately **$7.6 million** during the first nine months of fiscal 2023, recognizing a **gain of $7.4 million**[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) - The company is involved in two **legal proceedings**, a **class action** (Sinder matter) and a **shareholder derivative complaint** (Assad matter), both of which management believes are **without merit**[118](index=118&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition, operating results, segment performance, liquidity, and capital resources [Recent Developments](index=26&type=section&id=Recent%20Developments) - **Hurricane Ian**, which made landfall in September 2022, **significantly impacted** fiscal year 2023 fruit production, with recovery to pre-hurricane levels potentially taking up to two full seasons[133](index=133&type=chunk) - As of June 30, 2023, the company has received approximately **$21.4 million** in crop insurance proceeds and **$0.8 million** in property damage claims related to **Hurricane Ian**[134](index=134&type=chunk) - The company began treating its trees with a new application of **Oxytetracycline (OTC)** in January 2023 to mitigate the impacts of citrus greening, with over **35%** of trees treated as of June 30, 2023[135](index=135&type=chunk) - The company received the final portion of **Hurricane Irma federal relief funds**, totaling **$1.3 million**, during the nine months ended June 30, 2023[141](index=141&type=chunk) [Condensed Consolidated Results of Operations](index=28&type=section&id=Condensed%20Consolidated%20Results%20of%20Operations) Consolidated Results of Operations (in thousands) | Metric | YTD 2023 | YTD 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Total operating revenues** | $39,166 | $90,916 | $(51,750) | (56.9)% | | **Total gross profit** | $5,373 | $7,121 | $(1,748) | (24.5)% | | **Income (loss) from operations** | $(2,733) | $(558) | $(2,175) | NM | | **Net income attributable to Alico** | $895 | $33,539 | $(32,644) | (97.3)% | - The **significant decrease in revenue** for the nine months ended June 30, 2023, was **primarily driven by lower fruit production** due to **Hurricane Ian** and the termination of a major grove management services contract[149](index=149&type=chunk)[163](index=163&type=chunk) - Operating expenses decreased for the nine-month period, **largely due to inventory adjustments** made in late 2022 for **Hurricane Ian's** impact and the receipt of crop insurance reimbursements, which offset higher cultivation costs[154](index=154&type=chunk)[164](index=164&type=chunk) - **Net income** for the nine-month period **fell sharply**, primarily due to **significantly lower gains on the sale of real estate** compared to the prior year (**$7.4 million** in YTD 2023 vs. **$40.8 million** in YTD 2022)[168](index=168&type=chunk) [Segment Analysis](index=29&type=section&id=Segment%20Analysis) - **Alico Citrus**: Revenue for the nine months ended June 30, 2023, fell **57.5%** to **$37.9 million** from **$89.3 million** year-over-year, caused by a **51.4%** decrease in total boxes harvested due to **Hurricane Ian** and the termination of a major grove management contract[145](index=145&type=chunk)[149](index=149&type=chunk)[152](index=152&type=chunk) - The company's overall citrus production decrease of **51.4%** was **less severe** than the USDA's forecast for the entire Florida orange crop, which projected a **61.5%** decline for the 2022-23 season[153](index=153&type=chunk) - **Land Management and Other Operations**: Revenue for the nine months ended June 30, 2023, decreased by **22.1%** to **$1.2 million**, primarily due to reduced grazing and hunting lease revenue following sales of portions of the Alico Ranch[159](index=159&type=chunk)[161](index=161&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) Working Capital Summary (in thousands) | Metric | June 30, 2023 | September 30, 2022 | | :--- | :--- | :--- | | **Working capital** | $32,306 | $15,091 | | **Current ratio** | 3.10 to 1 | 1.91 to 1 | - The company's primary sources of liquidity are cash from operations, asset sales, and credit facilities, which management believes are sufficient to meet needs for at least the next twelve months[173](index=173&type=chunk)[176](index=176&type=chunk) - As of June 30, 2023, the company had approximately **$51.8 million** available on its **$70 million** working capital line of credit and **$25 million** available on its revolving line of credit[177](index=177&type=chunk) - The company was in compliance with **all financial covenants** as of June 30, 2023[179](index=179&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risk is interest rate fluctuations on variable rate debt, with no exposure to foreign exchange, commodity, or equity risks - The company is subject to **interest rate risk** on its **variable rate debt**, where a **one-percentage-point** increase in interest rates would have increased interest expense by approximately **$100,000** for the three months ended June 30, 2023[190](index=190&type=chunk) [Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were ineffective due to material weaknesses in internal control over financial reporting - As of June 30, 2023, **disclosure controls and procedures** were deemed **not effective** due to **ongoing material weaknesses** in internal control over financial reporting[195](index=195&type=chunk) - The **material weaknesses** identified relate to controls around the completeness and accuracy of information used for the **income tax provision** and the design of effective controls for evaluating **financial statement misstatements**[198](index=198&type=chunk)[200](index=200&type=chunk) - Management has implemented a **remediation plan**, including enhanced reconciliation and review processes for the tax provision and formal documentation for the evaluation of any misstatements[198](index=198&type=chunk) [Part II - OTHER INFORMATION](index=38&type=section&id=Part%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The company is a defendant in a securities class action and a shareholder derivative complaint, both believed to be without merit - A **class action complaint** (Sinder v. Alico, Inc.) was filed on February 17, 2023, alleging false and misleading statements related to the company's financial reporting and restatement[203](index=203&type=chunk) - A **shareholder derivative complaint** (Assad v. Brokaw et al.) was filed on March 7, 2023, with substantially similar allegations, and proceedings in this matter are **currently stayed**[204](index=204&type=chunk) - Management believes the claims in both legal matters are **without merit** and does not anticipate a **material adverse impact** on the company's financial condition[205](index=205&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) No material changes have occurred in the company's risk factors since the filing of its 2022 Annual Report on Form 10-K - **No material changes** have occurred in the company's **risk factors** since the filing of its 2022 Annual Report on Form 10-K[206](index=206&type=chunk) [Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) No unregistered equity securities were sold or repurchased by the issuer during the quarter ended June 30, 2023 - There were **no sales of unregistered equity securities** or **issuer repurchases of equity securities** during the reported period[207](index=207&type=chunk) ```